Credit cards are frequently used to buy a wide variety of products and services. A credit card transaction is started when a consumer selects goods and/or services to be purchased. These goods and/or services are brought to a point of sale (POS) clerk who inputs/scans the information pertaining to the goods and/or services into a cash register. The clerk takes the credit card and swipes or runs the card through a card reader 20, illustrated in FIG. 1. The card reader 20 is connected to the electronic cash register via a cable 24 and is connected to a data transmission system via a cable 26. The consumer account is typically embossed on the card and also encoded in a magnetic strip on the back of a card. The card reader 20 stores the account information and the amount of the sale and transmits this information to a credit card authorization system. For a valid card and one that has not been reported as lost or stolen, the transaction is automatically signaled to the clerk with either a signal or light provided on LED outputs 28, or with an authorization code on a display that indicates that the transaction has been authorized.
The clerk has the consumer sign the receipt, and the clerk keeps a copy of the receipt and gives a copy of the receipt to the consumer. The clerk is required to examine the signature on the receipt and match it to the signature on the back of the card. This is rarely done. In fact, within several hours of obtaining a lost or stolen credit card, a thief typically can fraudulently charge several thousand dollars of goods and services before the notification process typically stops the use of that card. Therefore, a need exists for an improved system to minimize fraud in credit card transactions.